Distribution

Freight forwarders and transportation providers

Transportation providers and freight forwarders are also controlled by a supply chain management practitioner. Transportation providers pick up product from one location and deliver them to another. Obviously, it is very costly to pick up some cargo in Los Angeles and drive it all the way to New York for delivery. For this reason, these companies consolidate shipments from different places in a departing hub (whether it be a port, a warehouse, or an airport), send them to an arriving hub, and then deliver them to their final destination.

Contract manufacturers

Contract manufacturers are the third type of suppliers, in which formal contracts between the supplier (the contract manufacturer) and your manufacturing company are relied upon. The contract manufacturer purchases or makes all of the components, assembles the product, tests it, and ships the finished product either directly to the customer or to a warehouse. Companies that want to get out of the manufacturing aspect of their products turn to contract manufacturers. The supply chain manager finds suitable contract manufacturers and manages the relationship after a contract has been signed.